Place-Based Public Policy in Southeast Asia:
Developing, Managing, and Innovating for Sustainability

Sustainable development "meets the needs of the present without compromising the ability of future generations to meet their own needs."⁴² The idea behind industrial symbiosis is for industrial and commercial facilities to move in the direction of sustainable development by taking nonproduct output (waste) from one facility and using it as an input for another production facility.

Industrial symbiosis is a key aspect of the overarching field of industrial ecology, which also includes concepts such as design for the environment, zero emissions,⁴³ and material flows analysis. Industrial ecology proposes that because industrial and commercial facilities exist within an essentially closed natural system, the study of their web of relationships and material and energy flows is more appropriate than just examining linear flows of inputs and outputs. It is rooted in the concept of eco-efficiency and draws heavily on the science of ecology and biological food chains to understand and model systems of industrial production.

Facilities in industrial symbiosis�also known as by-product synergy or eco-industrial parks⁴⁴�share outputs, such as wastewater, steam, gas, energy, or materials themselves, such as sawdust, fly ash, or sludge. Europeans, particularly the Danes, favor the term industrial symbiosis, whereas the World Business Council for Sustainable Development prefers to use "by-product synergy" and North American experts tend to talk about "eco-industrial parks." In the end, however, implementation of these programs looks much the same: share or sell as much of the nonproduct output as possible to reduce disposal costs and volume.

Many policymakers regard this idea as a relative luxury, to be implemented in the distant future, and very much contingent on development of expensive planning and management tools. Industrial symbiosis is a difficult concept to sell to an industrial community that is more immediately concerned with economic survival, scarcity of centralized wastewater and solid waste treatment facilities, and a total lack of hazardous treatment facilities. "Selling" the idea will ultimately depend on the demonstration of profitability. Eco-industrial strategies have shown economies of scale in developing shared infrastructure and reduced consumption of scarce resources; the successful program in Kalundborg, Denmark, grew over a period of 20 years, largely in response to limited water resources at the site of the facility. Furthermore, eco-industrial approaches are likely to be quite useful as a marketing tool both to the firms that colocate and to the park itself in attracting firms.

In many cases, this marketing opportunity appears to be attractive to firms that have chosen this model. Its strength comes from the assumption that it does not require new construction to work; industrial symbiosis merely requires analysis, communication, and the cooperation of already existing industrial and commercial facilities.

The concept of by-product synergy among two or three facilities, however, is not a new one; private manufacturers have traded by-products among themselves for years. In fact, the cost savings are easy to imagine if one asks the question "why should I pay someone to haul waste away from my facility, when I could sell the same material to someone who needs it as product input?"

It is the practice of purposely grouping multiple participants near each other in a formal, planned eco-industrial park that has yet to be mainstreamed in industrial planning. As with regional growth triangles, the physical development of eco-industrial parks is still nascent; much of the construction, recruiting, and implementation is left to do. Some models exist in Europe; several more in North America are in various stages of development (see box 4), and a few are operating in Asia and the Pacific, primarily in Australia, Fiji, Japan, and New Zealand (see appendix C). The value of this document, therefore, is to serve as a benchmark, so policymakers can first see how industrial symbiosis goals are expressed, and gauge the success of such goals in early stages.

The Industrial Estate Authority of Thailand (IEAT) has recently evaluated the feasibility of transforming existing industrial estates into eco-industrial parks. It defines these as communities of "businesses that cooperate with each other and with the local community to efficiently share resources (information, materials, water, energy, infrastructure, and natural habitat), leading to economic gains, gains in environmental quality, and equitable enhancement of human resources for the businesses and the local community."⁴⁵

Map Ta Phut Industrial Estate on Thailand�s eastern seaboard is 960 hectares (2,371 acres) in area and the site of two multinational petroleum refineries. IEAT has considered one possible industrial ecology scenario there that looks much like a schematic of the famous eco-industrial park in Kalundborg, Denmark. In it, a refinery provides oil sludge or gas to a central power plant, which reciprocates with steam. In addition to these energy flows, other "satellite" facilities engage in a series of material flows as well. To date in Map Ta Phut, a few exchanges with the central power plant exist, but the other linkages do not. IEAT reports that the region�s economic crisis and a downturn in the global petrochemical industry have put such plans on hold. IEAT says it plans to try this concept in the 334-hectare (826- acre) Pichit Industrial Estate, which is 600 kilometers north of Bangkok and has agriculture-related industries as its foundation.

The Philippine government is a bit further along in its program of grouping complementary industries in a system embracing industrial ecology. The Department of Trade and Industry and its Board of Investment (BOI) consider eco-industrial parks to be the "highest form" of the industrial clustering program, which was established by the department in 1997.⁴⁷ They predict that the nationwide industrial permitting process may eventually require the use of industrial ecology processes. DTI already offers tax breaks to develop eco-industrial parks. With respect to nationwide waste exchange programs, the Philippines has encountered hurdles unique to its archipelago geography: waste transport is more expensive and liability is greater with shipment by sea. On a national scale, it may be wiser in this case to embark on a program that strives for "zero emissions," rather than one that depends heavily on material exchanges. On a local scale, of course, such exchanges have the potential to work quite well.

DTI and BOI are leading the first of the industrial ecology experimental projects in the Philippines, under a program that is called Private Sector Participation in Managing the Environment (PRIME), sponsored by the United Nations Development Programme (UNDP). The project is but one example of a
slate of UNDP projects to "promote sustainable human development�development that is human-centered, equitable, and socially and environmentally sustainable" (see box 5).

Under the leadership of UNDP, PRIME is an industrial environmental project designed to encourage business competitiveness, while conserving the country�s natural environment through environmental management systems and cleaner production. Presumably, this approach will improve the bottom line of businesses, while ensuring compliance with environmental laws. PRIME fills what many view as a "gap" in Philippine Agenda 21, which is a long-term vision for the nation�s environment, because PRIME strengthens the role of the private sector in environmental improvements. At the conclusion of UNDP funding, PRIME hopes to receive funding from domestic financing institutions such as LandBank of the Philippines.

The project seeks to enhance emerging private sector initiatives that minimize industrial environmental impacts by developing four modules: (a) a "Business Agenda 21," which will serve as a blueprint for the role of the private sector in environment, (b) industrial ecology programs, (c) environmental management systems and ecolabeling techniques, and (d) environmental entrepreneurship in the environmental services industry. Each of these four programs has a corresponding module under the PRIME program. The second module on industrial ecology has a place-based development focus and is discussed below.

PRIME�s Industrial Ecology Module

BOI encourages businesses to include among their priorities industrial environmental activities, such as the development of "industrial ecosystems," self-regulation at the plant and firm level (e.g., earning ISO 14000 certification), waste-handling facilities for industrial and municipal wastes, and testing and measuring services for emissions and effluents. As such, it made sense for BOI to implement PRIME�s second module, which began in March 1998 on a four-year schedule. Specifically, the industrial ecology module is supposed to promote waste reduction in the country�s industrial growth centers by restructuring industrial systems to minimize waste and maximize recycling of materials and energy. The technical working group for the industrial ecology module includes representatives from industry associations, government, and NGOs, including the Philippine Rural Reconstruction Movement and EarthSavers.

PRIME�s industrial ecology module has five objectives:

Apply the principles of industrial ecology in industrial estates and growth centers through a pilot project to begin early in 1999.

The project coordinators hope to measure success by the presence of efficient energy use, waste minimization, waste exchange, and resource recovery and recycling among a group of firms located within a geographic area or in a "virtual industrial ecosystem." PRIME is evaluating sites for the pilot project and plans to hire an international expert to complete a site development plan and policy menu in 1999 to encourage industrial symbiosis. PRIME emphasizes that the resulting policy incentives offered will probably not be in the form of regulations but market-based incentives such as soft loans, grants, additional services, and training.

Develop policies that will encourage different industries with high potential for industrial symbiosis to locate in the same industrial site or growth center.

The module staff is reviewing and analyzing current policies (e.g., incentive systems for siting industries in designated economic zones and growth areas) as well as environmental laws. This will be the basis for developing policy recommendations. Ideally, say PRIME officials, the Philippine Economic Zone Authority would then use the same policy practices to create similar industrial ecology programs in all of its industrial estates and economic zones. Although UNDP will provide initial funds for the work, LandBank of the Philippines has already shown interest in providing future loans for the project. Private sector participants�perhaps through joint ventures⁴⁹�would also provide quantifiable resources, such as land and administrative expenses. The government itself could provide additional nonfinancial support that might take the form of technical assistance, facilitation, and other services.

Develop awareness among decisionmakers in the government and the private sector on the principles of industrial symbiosis and the economic benefits derived from implementing these in the country�s growth centers.

To accomplish this, the module staff already conducts conferences and workshops on strategies for sustainable industrialization as well as emerging opportunities for the greening of industrial estates. The information and education campaign targets private and public sector organizations involved in developing and managing industrial estates, including staff from the Department of Environment and Natural Resources, Department of Trade and Industry, Board of Investment, and Philippine Economic Zone Authority.⁵⁰ This component shall produce a critical mass of decisionmakers in the country�s growth centers.

Assist the Department of Trade and Industry, Board of Investment, and Philippine Economic Zone Authority in developing additional environmental standards for the environmental management of economic zones and industries.

The module staff will develop its own environmental standards as one useable template and is assisting with the development of "greening of BOI procedures" for companies seeking BOI registration and environmental clearance certificates. BOI is coordinating these efforts with the Environmental Management Bureau of the Department of Environment and Natural Resources. BOI also plans to help the Philippine Economic Zone Authority build its institutional capacity to implement environmental laws and regulation in its areas of jurisdiction.

Assist selected business enterprises that will construct and operate a centralized waste treatment facility for the industrial ecology module.

The module will set up criteria for selection of the winning bid and then PRIME will provide technical assistance to install a central waste facility within the premises of the pilot project site. PRIME will assist in obtaining funds for the waste facility. Ten industrial developers have expressed interest in participating in the program, largely for the technical and financial assistance that BOI has promised to provide to help pilot project participants come into compliance with existing environmental and other governmental regulations. BOI�s offer has had great appeal for these developers in the midst of Asia�s economic crisis and provides industry an opportunity to revamp its management and process technologies with the aid of a government partner. The voluntary participation of industrial developers in such a pilot project is crucial to the success of the program.

This formalized approach to industrial symbiosis is relatively new, so policymakers and participants face several challenges, particularly because by definition this model requires interaction and cooperation among multiple actors.

One important task to consider is that when one participant in the industrial ecology module experiences "down time," the rest of its partners must make sure they already have the depth and duplication of suppliers to provide stability in the interim. The vulnerability created by relying on a single firm�s waste stream can be greatly reduced through regional partnerships and industrial clusters, as proven by the Kalundborg, Denmark, participants.

Another task faced by public policy and corporate leaders pursuing this development strategy is gathering and analyzing basic data that track material inputs and outputs of manufacturing facilities; indeed, decisionmakers face a lack of resources, technology, and data that can easily identify material needs and potential exchanges. Some planned projects have stalled because conducting the original research necessary to facilitate exchange is difficult.

The Philippine Board of Investment requires facilities to reveal their material input and output as part of the permitting process, and the Philippine Department of Environment and Natural Resources requires all new industrial sites to produce an environmental impact assessment with much of the same information. The assessment document is publicly available and could be used as a tool to create a central data base to facilitate waste exchange, but it would take a serious effort in time and money to put the data into a usable format.

U.S. EPA�s data bases, although still relatively new, show real potential for industrial planning (see box 6). They are publicly accessible and address a variety of real-life issues. They do, however, raise questions about their feasibility. For instance, the amount of data required for all three of them to run smoothly translates into a considerable time and financial commitment for the software provider as well as the reporting facilities. Also, tracking all the inputs and outputs may face resistance from corporations that consider these questions impudent and the answers proprietary. But, in reality, a company would only need to provide information about the specific material it wanted to trade.

Some believe it just may be faster and more effective for corporations that are interested in a symbiotic relationship to cull the specific pieces of information from the Internet through bulletin boards or corporate web sites. One private company that has designed its own proprietary materials tracking software is Bechtel Consulting. Its Industrial Materials Exchange Planner features different data than EPA�s and translates facility information into a resource map that facilitates planning by material flow, commodity, industry, and location.⁵¹ In addition to detailed facility input and output information, Bechtel�s model also incorporates current market prices, industry�s quantitative standards, and other consumer and downstream qualitative requirements. The company markets this capability as a tool that can be site-specific, regional, or global in its policy and planning implications. Bechtel has used its software to evaluate sites in Brownsville, Texas; New Haven, Connecticut; Jubail Industrial Complex, Saudi Arabia; Tampico, Mexico; a petrochemical project managed by the Philippine National Oil Company; and, also in the Philippines, Laguna Technopark, managed by the Ayala group.

 Another option in gaining access to facility information can be through cooperative agreements with large multinational firms that can then foster partnerships with the smaller firms in their local supply chain. With all of these private sector approaches, however, research and implementation becomes more of a private initiative, with little room for overall planning, coordination, and participation by interested government agencies.